__economic thinking about sports__

The Secondary Ticket Market in Boston

2011 September 6

by Skip Sauer

Good story by Shira Springer in today’s Boston Globe on two proposed pieces of legislation that would lift the cap, one partially, on the secondary ticket market in Massachusetts. A “nearly forgotten Massachusetts law dating to 1924” is the target. Springer covers several facets of the issue, most intriguingly the different approaches of the Patriots and Red Sox to the secondary market. The Sox (and MLB more generally) support the market and the right of season ticket holders to have “a safe and secure and fraud-free way to resell tickets.” The Patriots revoke the tickets of fans who sell them for a price over face value. That’s quite a contrast. What might account for the different views of the two teams toward the secondary market?

NFL teams have viewed “the right” to purchase game tickets as a marketable privilege. PSLs are the most egregious attempt to limit the nature of resale, but with multi-year ticket wait lists, teams can charge per-ticket prices high enough to capture almost all of the additional revenue that the secondary ticket market might offer. MLB tickets are in much lower demand, with an order of magnitude more games (8 vs 81), making it less reasonable for a MLB season ticket holder to attend each and every game. Additionally, lower desirability games like weekday day-games or uninteresting opponents makes the gap between the value of the best and worst MLB tickets much larger. Reject enough season ticket holders for scalping might mean lost revenue for the Sox, but the Pats would lose nothing. The pricing and behavior suggests a retail model for NFL tickets, but a wholesale model for MLB.